Published: 18 May 2022
Location: London, UK
According to the data from the Office for National Statistics (ONS) released this morning, the consumer price index (CPI) measure of inflation rose to 9% in April, the highest it has been since 1997. This is up from a 30-year high of 7% in March and is in line with Bank of England (BoE) predictions. The rate is five times Threadneedle Street's 2% target. Governor Andrew Bailey has implied that the central bank is prepared to raise interest rates still further to stem inflation even if that leads to a recession. Earlier in May, the BoE increased interest rates for the fourth consecutive time, from 0.75% to 1% — the highest level in 13 years.
Former Bank of England governor Mervyn King has criticised the central bank’s current approach, calling for a hike in interest rates to show a “strong, clear signal now”. Speaking on LBC, Lord King said central banks worldwide had made “serious mistakes in not acting sooner” and questioned current bank policy. “The idea that interest rates of 1% are going to have much impact on the inflation rate is really very strange,” he said. He also queried current governor Andrew Bailey’s suggestion that 80% of inflation is due to outside forces such as global energy and food hikes, calling that a “debatable figure” and spoke out against the policy of quantitative easing during the pandemic.
There are more job vacancies than unemployed people in the UK for the first time since records began. The unemployment rate fell to 3.7% between January and March, its lowest for almost 50 years, as job openings rose to a new high of 1.3 million, the Office for National Statistics (ONS) said. The data also showed there was a rise in the number of people moving from economic inactivity - classed as those aged 16-64 who haven't been working or seeking a job - into employment; and that people moving from job-to-job also reached a record high "driven by resignations rather than dismissals", said the ONS. However, "Total employment, while up on the quarter, remains below its pre-pandemic level," said Darren Morgan, director of economic statistics at the ONS, as "Since the start of the pandemic, around half a million more people have completely disengaged from the labour market".
MPs yesterday voted down a Labour party proposal to impose a windfall tax on energy companies. The House of Commons rejected the motion by 310 votes to 248.
Business Secretary Kwasi Kwarteng has written to leading petrol retailers to raise concerns that the industry is passing on the recent cut in fuel duty, after diesel prices hit another record high. He said the public was "rightly expressing concern about the pace of the increase in prices at the forecourt" and that drivers were frustrated that the fuel duty cut "does not appear to have been passed through to forecourt prices in any visible or meaningful way". "It is also unacceptable that different locations even within the same retail chain have widely different prices," he wrote. Kwarteng also said he had recently engaged the Competition and Markets Authority about the issue, as a result of "perceived intransigence to date". "I have been reassured that they will not hesitate to use their powers to act against petrol stations if there is evidence that they are infringing competition or consumer law," he said. The Petrol Retailers Association responded saying costs had remained high and that margins were "often not enough to cover operating costs". The 5p per litre cut in fuel duty was implemented in March.
The chairman of Marks & Spencer has backed government plans to override parts of the Northern Ireland protocol. The Guardian says Archie Norman, a former Conservative MP, is calling on the UK government and the EU to come to an agreement, saying the rules for sending food between them were “highly bureaucratic and pretty pointless” given that British food standards were in line with or higher than those of Brussels. Norman said: “At the moment, wagons arriving in the Republic of Ireland have to carry 700 pages of documentation it takes eight hours to prepare the documentation some of the descriptors, particularly of animal products, have to be written in Latin. It has to be in a certain typeface.” He said the government’s proposal to override parts of the agreement signed as part of Boris Johnson’s Brexit deal and remove checks on goods crossing the Irish Sea was a “triumph of common sense over rules-based mentality” and “will make sure at a time of inflation that the Northern Ireland people can get the fresh food they are used to and are entitled to”.
Andrew Selley, CEO of Bidfood, has warned the cost-of-living crisis will lead to “some difficult decisions for school caterers.” The boss of the leading food wholesaler told BBC Radio 4’s Today programme: “Either they are going to serve smaller portions or use cheaper ingredients, which is not going to be good for children.” He said that baked goods are currently up to 30% more expensive due to rising wheat prices, which also affect pasta, eggs and chicken, and that the price of sunflower oil has also “doubled against a year ago”, after being pushed higher by the invasion of Ukraine, one of the world’s biggest food oil exporters. On the same programme, Marks & Spencer chair Archie Norman also warned that food prices could soar by as much as 10% this year. “It wouldn’t be surprising to see food price inflation over the course of the year running towards 8% to 10%,” he said.
The Public Accounts Committee (PAC) has published a new report saying some 4.9 billion pounds of taxpayers’ money will be "lost to fraud and error" alone as a result of the government's handling of Covid pandemic business support schemes. The Department for Business, Energy & Industrial Strategy (BEIS) guaranteed £79.3bn in loans and £21.8bn in grants as part of its business support schemes during 2020 and 2021. Dame Meg Hillier MP, PAC chair, wrote that the scheme “offered an open goal to fraudsters and embezzlers and they have cashed in, adding billions and billions to taxpayer woes."
Veteran broadcaster Andrew Neil has urged the BBC to launch a subscription service, warning that the corporation's £159 annual licence fee is too small for it to compete with deep-pocketed American streaming services. Appearing before the House of Lords Communications Committee, he proposed continuing to fund public service broadcasting such as news, documentaries, children’s programming, arts coverage, and radio via a licence fee alongside a subscription-style model to fund commercial programmes and "ratings winners" such as Strictly. Culture secretary Nadine Dorries recently announced the BBC licence fee must be frozen for two years, raising the prospect of more job cuts and a budget gap stretching to around £1.5bn.
House prices for first-time buyers have been increasing by £24 per day on average, according to analysis by Direct Line Home Insurance. The average first-time buyer faced paying £223,751 for a property in 2021, meaning someone getting on the property ladder typically needed to find £43,623 more than they would have in 2016.
The Guardian says Mastercard is rolling out a controversial programme that will allow shoppers to pay at the till with a mere smile or wave of the hand, as it tries to secure a slice of the $18bn (£14.4bn) biometrics market. The company says the move will speed up payments, cut queues and provide more security than a standard credit or debit card. “Once enrolled, there is no need to slow down the checkout queue searching through their pockets or bag,” Mastercard said. “Consumers can simply check the bill and smile into a camera or wave their hand over a reader to pay.” Mastercard also claimed the new payment system would be more hygienic.
Uber Technologies' general manager for Northern Europe, Jamie Heywood,is stepping down to focus on a book project. He has been in the role for four years.
Tax filings by pressure group Black Lives Matter (BLM) reveal hundreds of thousands of dollars were paid to a select group of consultants which included relatives or close associates of BLM's founders. These included BLM co-founder Patrisse Cullor's brother, Paul Cullors, whose security firm was paid $840,000. Meanwhile, Trap Heals LLC, a company founded by Damon Turner, who fathered a child with Ms Cullors, received almost $970,000, and more than $2.1 million was paid to Bowers Consulting, whose founder, Shalomyah Bowers, was recently named a board member of the BLM foundation. BLM also bought a $6 million seven-bedroom property in Los Angeles intended for use as a “housing and studio space”. The racial justice movement received $90 million in donations following 2020 protests triggered by the police murder of George Floyd.
Netflix has laid off about 150 staff, mainly at its office in California. The layoffs account for about 2% of its North American workforce. Netflix said the job losses were due to the slump in the company's revenue. The streaming service has lost subscribers this year and not taken on new subscribers in the numbers projected.
Only Tesla and Mercedes are the only firms out of 12 major motor manufacturers who are on course to shift to zero-emissions vehicles at a rate in line with international climate goals of limiting global heating to 1.5C according to the campaign group InfluenceMap.
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